The Financial Markets Division

The Financial Markets Division (FMD) is responsible for the implementation of the Central Bank’s monetary policy, the management of the country’s international reserves as well as the issuance and management of government securities on behalf of the government. It has as its aim the development of the financial markets so as to ensure well-functioning and efficient money and foreign exchange markets.

The objectives of FMD are to:

Meet the set targets through the effective conduct of domestic market operations

Efficiently and effectively execute government securities’ issuances and management as fiscal agent

Ensure that the Bank does not engage in activities which could be detrimental to its financial health and reputation, whilst implementing its policies

Effectively conclude all reserve management transactions by ensuring that the settlement and reconciliation are conducted timely and accurately, all the necessary documentation is completed and the transactions are recorded correctly as per the International Financial Reporting standards (IFRS).

The division is divided into four sections which fall under the Front, Middle and Back Offices.

1. Market Operations Section (Front Office)

This section is responsible for the implementation of monetary policy mainly through the conduct of the Bank’s open market operations as approved by the Monetary Policy Technical Committee (MPTC). It also has the responsibility for the issuance and management of government securities on behalf of the government. In addition, the section carries out operations related to the Bank’s standing facilities.

2. Reserve Management Section (Front Office)

The Reserve Management section handles the day-to-day management of the foreign exchange reserves in compliance with the Board’s approved Investment Policy and the Investment Guidelines set by the Investment Committee (IC). International reserves are managed considering the investment policy objectives of capital preservation, liquidity management and maximising returns in that order of priority. The section makes recommendations to IC with regards to investment strategies and executes investment decisions on behalf of the Bank.

3. Financial & Risk Analysis Section (Middle Office)

The section is responsible for the middle office functions of the Bank. This involves undertaking market research and in-depth analysis on the domestic/international financial markets and reserves management so as to provide analytical support to the front office and IC. In addition, it constructs appropriate benchmarks, develops models and/or tools for use by the front office as well as designs strategies so as to meet set targets/objectives. Moreover, the section is responsible for measuring and reporting financial risks involved in undertaking market operations and reserves management activities as well as monitoring compliance of these activities against set limits, guidelines, policies and approved strategies.

4. Settlement & Accounting Section (Back Office)

The back office functions of reserves management is undertaken by this section, which is further divided into two units. The first unit is the Trade Settlement unit which is mainly responsible for the confirmation and settlement of investment management operations, as well as the management of custodian account(s). As for the Treasury Accounting unit, it is mainly responsible for the accurate recording and reconciliations of all reserve management transactions, in line with IFRS.